Rio Tinto plc (ADR) (RIO): Hedge Fund and Insider Sentiment Unchanged, What Should You Do?

In today’s marketplace, there are plenty of gauges market participants can use to track their holdings. Two of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top investment managers can outpace the S&P 500 by a healthy margin (see just how much).

Just as key, bullish insider trading sentiment is a second way to look at the stock market universe. There are a variety of motivations for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this strategy if shareholders know where to look (learn more here).

Thus, it’s important to analyze the recent info about Rio Tinto plc (ADR) (NYSE:RIO).

What does the smart money think about Rio Tinto plc (ADR) (NYSE:RIO)?

In preparation for the third quarter, a total of 11 of the hedge funds we track were long in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly.

When using filings from the hedgies we track, Millennium Management, managed by Israel Englander, holds the most valuable position in Rio Tinto plc (ADR) (NYSE:RIO). Millennium Management has a $19.3 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $15.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism include Matthew Hulsizer’s PEAK6 Capital Management, D. E. Shaw’s D E Shaw and Ray Dalio’s Bridgewater Associates.

Judging by the fact that Rio Tinto plc (ADR) (NYSE:RIO) has experienced dropping sentiment from the top-tier hedge fund industry, we can see that there was a specific group of hedge funds that slashed their entire stakes last quarter. It’s worth mentioning that James Crichton and Adam Weiss’s Scout Capital Management dumped the biggest stake of the 450+ funds we watch, valued at an estimated $37.7 million in stock. Russell Hawkins’s fund, Hawkins Capital, also dumped its stock, about $14.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

What do corporate executives and insiders think about Rio Tinto plc (ADR) (NYSE:RIO)?

Bullish insider trading is most useful when the primary stock in question has experienced transactions within the past six months. Over the latest half-year time frame, Rio Tinto plc (ADR) (NYSE:RIO) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Rio Tinto plc (ADR) (NYSE:RIO). These stocks are Cameco Corporation (USA) (NYSE:CCJ), Teck Resources Ltd (USA) (NYSE:TCK), BHP Billiton Limited (ADR) (NYSE:BHP), BHP Billiton plc (ADR) (NYSE:BBL), and Vale SA (ADR) (NYSE:VALE). This group of stocks are in the industrial metals & minerals industry and their market caps match RIO’s market cap.

Using the results explained by the previously mentioned strategies, average investors must always track hedge fund and insider trading activity, and Rio Tinto plc (ADR) (NYSE:RIO) shareholders fit into this picture quite nicely.

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